Australia’s economy has smashed expectations, with new GDP figures revealing that the economy is continuing to enjoy strong growth despite concerns over stagnated wages.
The economy grew by 0.9 per cent in the June quarter.
The economy also expanded by 3.4 per cent over the 12 months to June, the national accounts released on Wednesday show.
The growth far outstrips market consensus forecasts, which had predicted quarterly growth of 0.7 per cent and an annual improvement of 2.8 per cent.
Newly appointed treasurer Josh Frydenberg delighted in the figures, telling the press pack in Canberra that it was the fastest rate of growth since “the height of the mining boom” in September 2012.
The figures “highlight the strength and the resilience of the Australian economy”, which is in its 27th year of consecutive economic growth, Mr Frydenberg said.
According to the Australian Bureau of Statistics figures, domestic demand rose 0.6 per cent in the three months to June.
That reflected strong household expenditure, which grew by 0.7 per cent in the quarter, with spending up on both discretionary and non-discretionary goods and services.
The household sector, which has been struggling under low wage growth and falling house prices, was the main contributor to the growth spurt.
It accounted for 0.4 percentage points, or just under half the quarter’s growth, picking up the baton from the export sector, which supported the first quarter’s strength.
More Australians in work had played a role in that spending, Mr Frydenberg said.
“Households are benefiting from a recent strong employment growth,” he told reporters in Canberra.
Employment improvements have also chipped into a rise in compensation to employees, he said.
Wages rose 0.7 per cent, the figures show, largely driven by an increase in employment of young Australians.
In 2017-18, more than 95,000 young Australians found employment, the best financial year result since 1988-1989, the treasurer said.
Net exports contributed a more modest 0.2 percentage points.
“Growth in domestic demand accounts for over half the growth in GDP, and reflected strength in household expenditure,” ABS chief economist Bruce Hockman told the ABC.
“Domestic demand increased 0.6 per cent for the quarter, driven by a 0.7 per cent growth in household consumption, with increased expenditure on both discretionary and non-discretionary goods and services.”
Household consumption rose by 3 per cent over the year, while government consumption was stronger, up 5.1 per cent over the 2018 financial year.
“Public investment remained at elevated levels, reflecting continued work on infrastructure projects across the nation,” Mr Hockman said.